What exactly is a double taxation treaty?
A double taxation treaty is an agreement between two countries that specifies which country is entitled to taxing which sources of income.
The goal is to avoid double taxation (or no taxation) in cross-border situations, such as when a person lives in one country and works in another. Or if someone has property abroad.
A tax treaty also governs what happens when a company’s activities abroad result in a tax liability in that country. If under the tax treaty the activities are taxable in a particular country, the company is deemed to have a permanent establishment in that country.
The basic premise is that as a resident of a country (or, of course, as an entity), you declare your worldwide income in your country of residence. Under the tax treaty, in your country of residence you are entitled to reduce the tax due (double tax relief) based on tax paid in the other country.
Which countries have signed a double taxation treaty with the Netherlands?
The Netherlands has signed tax treaties with many countries. Although tax treaties are based on the OECD Model Tax Convention, the final clauses may vary for each country. That is why it is important to consult the specific treaty text when appropriate.
Please find full information on the website of the Dutch Tax Authority (in Dutch):
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